Case Study: CreepyPasta.com, The $90,000 Content Site

After buying CreepyPasta.com for $65,500 in April 2017, Ramon Van Meer just sold the site for a staggering $90,000! I had the chance to catch up with him to discuss the buying and selling of the site and just how he grew the site during the 5 months he owned the site.

Tell us about your background as a web entrepreneur.

I have been an internet entrepreneur for almost 10 years now and have started or ran countless websites. From selling custom pinatas online to running a site about wrestling and everything in between. At this moment we only run 4 websites.

What is your education/employment/career background?

Little embarrassing but I dropped out school when I was 15 years old (long story), but had many jobs and businesses.

In April 2017, you bought CreepyPasta.com for $65,500. Tell us what you liked about the business?

I liked that the site was 9 years old and was started by the owner out of a passion. For me, that is really important that the owner didn’t start the site just to make money. Couple other things that attracted me were the loyal fanbase and the fact that in this case the content was created by the users, so the site doesn’t have to pay for the content.

What due diligence steps did you perform?

I requested GA access, besides that, I use tools like SEMrush and similarweb to do more research. After the sale, I asked the seller to screen share and login to Adsense. In this case, it was a very straight forwarded website and I bought the site more for the traffic so GA access was really helpful.

Upon purchase, how did you grow the site?
Couple things, I started a Fanpage that I grew to 180 likes, a Facebook group with over 20k members, started collecting emails so I could send out a newsletter, and a mobile app. Besides those things I played around with posting more content, different kind of content, new comment platform, adding share buttons to the site and so on.

Did you buy the site with a game plan of selling it for nearly 1.5x as much 6 months later?

Well, almost all the sites I bought in the past my strategy is to sell it down the line, but normally the timeframe is between 12 to 18 months. But this time I decided to sell it sooner because I want to fully focus on my main website soaphub.com.

After six months of ownership, you sold CreepyPasta.com for $90,000, which was a 5x annual net profit multiple! Tell us about why the business sold for such a high multiple and what the sale process was like.

Couple factors played here, but most important was the trend. Yes, if you take the last 12 month trailing the multiple was 5x but the revenue of creepypasta in the last 3 months was over $2,200. If you take this value the multiple was 3.4. So big lasting uptrend was one reason, another one was all the changes I implemented, I built an Android and iPhone app that only started to make money couple weeks before I listed the website, the fan page and so on. So a lot of experienced buyers saw the value and potential of this website what contributed in selling it for a good multiple.

How did you transfer ownership of the website?
Very easy, in this case, we only had to transfer the domains, hosting, apps and other IPs. But it was really easy to work with.

What originally brought you to Flippa? (How did you find it?)

Oh man, I have been a member at Flippa for seven or eight years now. Not sure how I found it but everyone knows that Flippa is the number one marketplace for buying or selling websites.

You worked with Colton Moffitt, one of our account managers. Can you tell us the experience of working with him and the rest of our account management team?

It was very easy to work with Colton, this is the first time I sold a website on Flippa with the help of an account manager and I was very pleased. He made sure the listing was fully optimized, knew what were good times to go live and so on.

Was this the only online business you operate?

No, I run a media company called Pink Java Media and our biggest website is called Soap Hub, a site about daytime TV.

What advice would you give to those looking to sell their websites and other online businesses?

Oh I can talk hours about this subject, but couple things that pop into my head are:

  • Realistic valuation. Just because you think your site is worth 10M it doesn’t mean it is really worth 10M. Typically valuation is anywhere between 2 and 5 your 12-month trailing profit. The more assets your site have like super strong SEO rankings, mobile app downloads, email lists, 5 years or older and so on, the higher the multiple you can ask.
  • Have all your ducks in a row. And by that, I mean GA reports, Adsense screenshots, and any other report or screenshot that involves your website. The more the better, this will build trust with potential buyers and the more info they have the better the offer they can make. I personally appreciate if a listing has a video walkthrough made by the seller.
  • Price is not everything. Not every buyer is the same, so when you have a couple offers also make sure that the buyer is legit, is the buyer experienced or would you need to hold their hand in the after-sale process. So sometimes it might be wise to take a little lower offer but the buyer is legit and the transfer is smooth and fast